(+) Dangote: The $19 Billion Project To End Fuel Imports

One of the most anticipated energy projects in the world. The long-awaited Dangote oil refinery, located near Lagos, Nigeria is expected to deliver about 550 000 b/d with the potential to ramp up to achieve 650 000 b/d. This will meet the Nigerian domestic demand in refined products, with the possibility to export any surplus products.

Almost all crude oil out of west Africa is exported, and the main reason for that is the notoriously fragile refining-industry in the region. Nigeria is no exception. Poor management, lack of investments, sabotage and oil thefts has been an historical wrench in the works for some time. But for the last decade one giant project has dominated the Nigerian oil industry, Dangote. The $19bn refinery in Lagos is named after the founder of the Dangote Group, and billionaire Aliko Dangote, the richest man in Africa according to the Bloomberg Billionaires Index. This refinery will create thousands of jobs and has almost taken a mythical meaning for the Nigerian oil industry since 2013. And the project is seen as the great gamechanger of African energy, despite the continued delays in construction.

Dangote oil refinery:

• Nigeria is the biggest economy, and biggest oil producer in Africa.
• In the last couple of years Nigeria has had production issues. Capable of producing 2.5 MMbpd but is struggling to exceed 1.2 – 1.3 MMbpd. With these numbers Nigeria is unable to meet its OPEC quota.
• Nigeria exports all crude and imports refined products. That puts a heavy weight on the foreign exchange reserves and the economy.
• Initial cost expectation for the Dangote refinery was $9bn, but it has now ballooned to almost $20bn.
• Expected to be Africa`s biggest oil refinery with a capacity of 650 000 bpd. It will take time to ramp up.
• 450 000 barrels of crude will be dedicated to meet domestic requirements.
• Process a variety of Nigerian light- medium grade crude, with ability to process other crudes.
• NNPC (Nigerian National Petroleum Corporation holds a 20% equity in the refinery and the refinery will receive 300 000 bpd from NNPC.
• President Muhammadu Buhari commissioned the Dangote refinery on May 22, 2023.
• The 500 000 to 650 000 bpd refining capacity will have a significant effect on the Atlantic basin.

Refined Products:

• Set to produce Euro-V quality clean fuels, including gasoline, diesel, jet fuel and polypropylene.
• Exports of gasoline depends on the spec of the product. For export they will produce higher quality products, 10-ppm sulphur gasoline for the overall market.
• Currently Nigeria uses a 500-ppm high sulphur gasoline with cheap petrochemicals.
• The Dangote refinery is designed to produced up to 50 million litres (10.4 Mt a year) of gasoline and approximately 15 million litres of diesel (4.6 Mt a year) a day. It will also produce a reported 4 Mt of jet fuel a year.

En vandrelysten finansnerd med tydelige spor av graphomania og bibliofili i blodet. Hans første møte med markedet bortsett fra noen kornete aksjekurser på 28" tekst TV, var igjennom Odin fondene i 2000 – 2001. Der diversifiserte han pengene ut på ODIN Offshore, ODIN Norden og ODIN Finland, helt tilfeldig. Etter å først dyppet stortåen forsiktig ned i vannet ble han etter hvert hektet. I 2002 gjorde han sin første handel i en enkeltaksje, Selskapet hadde ticker symbolet, STL- eller Statoil på folkemunne. Der kastet han alle kortene i panikk etter en liten korreksjon noen måneder senere, han elsket det! Nå kombinerer han sine to hobbyer, skriving og finans og smelter dem sammen til en lidenskap.